Multiple Choice Quiz Questions – Chapter 6 – Budget and Fiscal Deficits

Multiple Choice Quiz Questions, which are covered in this chapter, relate to the topic, Budget and Fiscal Deficits. Multiple Choice Quiz Questions Test contains 10 questions. Answers to Multiple Choice Quiz Questions are available at the end of the last question.

1. _______ is the difference between total receipts and total expenditure:

(a)    Fiscal Deficit

(b)    Budget Deficit

(c)     Revenue Deficit

(a)    Capital Deficit

2. Revenue deficit in India is:

(a)    Positive

(b)    Negative

(c)     Zero

(a)    Balanced

3. If borrowing and other liabilities are added to the budget deficits we get ____:

(a)    Fiscal Deficit

(b)    Primary Deficit

(c)     Capital Deficit

(a)    Revenue Deficit

4. The FRBM Act aims at reducing gross fiscal deficit by:

(a)    2%

(b)    1%

(c)     0.5%

(a)    3%

5. FRBM Act was passed in ________:

(a)    1999

(b)    2000

(c)     2003

(a)    2004

6. The most important sources of plan finance to cover up gap between intended expenditure and available resource is in:

(a)    Direct taxes

(b)    Indirect taxes

(c)     Deficit financing

(a)    Foreign aid

7. Fiscal Policy refers to a policy of :

(a)    Money lenders

(b)    Government Finance

(c)     Commercial banks

(a)    Monetary authority

8. Deficit Financing means :

(a)    Public expenditure in excess of public revenue

(b)    Public revenue in excess of public expenditure

(c)     Both (a) & (b)

(a)    None

9. _______ refers to public revenue, expenditure and allied matters.

(a)    Fiscal policy

(b)    Monetary policy

(c)     Economic policy

(a)    None of these.

10. Which of these is a side effect of deflation?

(a)    Decreasing unemployment

(b)    Increase in demand

(c)     Economic depression

(a)    Increase in personal expenditure.


1. (b) Budget Deficit

2. (b) Negative

3. (a) Fiscal Deficit

4. (c) 0.5%

5. (c) 2003

6. (c) Deficit financing

7. (b) Government Finance

8. (a) Public expenditure in excess of public revenue

9. (a) Fiscal policy

10 (c) Economic depression

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